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Bain Capital and GuitarCenter - is the end coming soon?

06-11-2012, 11:34 AM

I have no idea if this is accurate or not (so yeah, I'm spreading unsubstantiated rumors, fair enough) but was listening to the radio today, and a caller called in talking about Guitar Center being owned by Bain (it was a liberal AM show) and the caller seemed informative enough. He said GC was about $1.7 billion in debt from being owned by Bain, and that some of the big companies like Fender and Ibanez were starting to pull out because they were not being paid by GC. And at some point, the chain would just go under. No idea if this is true or not, probably not too hard to find out how much GC is in debt. I know this website is owned by the GC conglomerate, so there's that too.

Anyone know if this is true, and whether or not Fender, etc. are going to pull out of GC in the near future? I don't think it's happened yet, but it could be on the near horizon apparently.

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While it's true Guitar Center is owned by Bain Fender and Ibanez both rely heavily on GC and its other companies (MF, M123, etc...) to move their product.

I know that Fender is not as profitable as many may have thought due to their recent financial disclosure but if they were to stop selling to the biggest retail outlet they have I can not imagine it would be a good move.

I would say it was (under informed) Romney bashing, as he is no longer with Bain Capital.

For the people who want a Mom and Pop revival, I have to ask - were you around before GC? While there is some romantic notion of the days of small town music stores in 90% of the ones I remember they were way worse then GC.

I remember the days of seeing 4 strats (black, white, red, burst) and maybe 1 Tele (maybe!) on the wall and a couple LPs. Want a special color? No problem - 20% down special order and no returns. Usually these places were staffed with people who were much bigger douchebags then the typical moron that works at GC. Strings were $9.00 a set at one place and most of them were not open on Sunday or Holidays.

There were some exceptions - and many of the stores that were exceptions are still open today and doing well.

I don't like GC, but I can remember being excited when they came to my town in 93/94.

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Romney is not as awesome as you make him out to be. GC is not long for the world. Fact not fiction. Romney has plenty of issues. Unfortunately even under another commander they will take the banks and vendors for a ton of money. The industry needs the independents more than you think. 100% of ALL of the service that occurs in the MI industry happens at an independent level. Take those repair shops away and you just have broken gear and places to buy new. The same logic applies to the car industry. Many of the good repair shops are the independents. We have run a repair shop for 40 years and we are crushed in repairs. Why you ask? Well..........thankfully we R 1 of those Mom and Pops who have thrived in an industry dominated by the Box Stores. ALL of the knowledge in the music industry is housed under the roofs of the independents. I guess the next time you're in a GC ask someone how to adjust a neck, do a fret file, install a pickup, how to setup a compressor, recone a speaker etc. But don't be surprised when they give you a dumb look. I thank God everyday they are open because I know that no matter what we will always have work. Will I shed a tear when they are no longer around. NOPE.

i wouldnt be able to afford to buy gear anymore if GC went under. i think a lot of people would be affected the same way, even if indirectly. w/o gc setting the lowest price points (most of the time) i bet the little stores and even sam ash would go ****************ing crazy with very high prices.

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I know that Fender is not as profitable as many may have thought due to their recent financial disclosure but if they were to stop selling to the biggest retail outlet they have I can not imagine it would be a good move.

I get where you are coming from... but if GC isn't paying Fender, Fender isn't really "selling" them anything. They certainly can't give away millions of dollars of guitars to a company who isn't paying for them.

**************** Harmony Central

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They owe Fender millions of dollars. A rep in the industry that I recently talked to said that he believes it to be in excess of $30 million dollars. No small potatoes for sure. Dumb it down however you like but the big component of that is because the ex CEO of GC became the CEO of Fender. Now they are between a rock and a hard place. Not to mention Fender is $246 million in debt with about $236 million due next year. Do the math not a good place to be. Production is way outpacing demand. One reason why so many stores are switching to used rather than sustain these huge franchises.

There are a lot of good alternative to GC these days though, mostly online shops, like Sweetwater, American Musical Supply, PGS, etc. Plus their own MF and Music123. I never really understood why both MF and M123 both exist, since they're the same company (or maybe they aren't anymore).

And if Fender etc., are owed money - and again I don't know this to be true, just saying "if" they're better off pulling out than staying in, just common business sense really. Unless GC can pay up their bill.

I know my local shop was hurt when Gibson pulled out because they didn't meet the minimum $100k order, so basically many of the small m&p shops were hurt because they no longer had access to the same gear to sell. Understandably it's easier for the manufacturers to deal with less stores - all they have to deal with are a couple of distributors to sell a lot of product, instead of dealing with hundreds of small shops that sell not very much. Until the GC of the world decide not to pay you, and then you're pretty stuck. Sort of like Walmart, they can sell a lot of your goods, but then they have you over a barrel as you don't have any other distribution set up.

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i wouldnt be able to afford to buy gear anymore if GC went under. i think a lot of people would be affected the same way, even if indirectly. w/o gc setting the lowest price points (most of the time) i bet the little stores and even sam ash would go ****************ing crazy with very high prices.

you greedy capitalist pig!

Originally Posted by Player99

No it is not repairable. You need to send the forum to me, and I will throw it away and sell you a new forum at full retail plus shipping. That is your only option.

Originally Posted by eco1

i just got fed up with my ****************ing neighbor and shot him a few minutes ago.

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They are no good for the industry and they don't have customer service or product know how. If all you shop for is the lowest price then your missing why the independents exist. Let me know how many GC's have a full blown service department. Also ask a professional musician where he/she goes to maintain there instrument. I'll bet the answer will be not a GC but one of those no good mom and pop stores with high prices. Do the math what little you pay higher is returned ten fold in customer service. When your gear breaks down go to GC and have them give you a loaner. Don't be surprised when they give you a dirty look.

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As far as I know, the knock on Bain is that they buy up companies that aren't doing so well and totally streamline (or gut them) as much as possible to make sure they turn a profit so they can sell them off at a profit, but the way the do it is more of a short term fix and doesn't set the company up for sustaining itself. Theoretically, there's no way of telling that those companies wouldn't have went under anyhow, but I guess it's disingenuous for Romney to say he's creating jobs because it's different than being an entrepenuer or a venture capitalist which is what the attacks on him are leveling more or less.

As far as Guitar Center goes, it's hard to say what being a Bain company would really mean. What costs could Guitar Center really cut? Do they really even have comparable competition putting the heat on them? Their workers don't get paid much, they don't actually make the stuff in their stores. All they could really do is either jack up prices or try to stop selling a bunch of products that aren't profitable?

I really think of GC goes under it's probably not because of Bain, but ultimately because their niche as a brick and mortar store is disappearing. The same thing is happening to Best Buy and Barnes and Noble too, but at different speeds.

TL;DR It's the internet's fault, probably not Romney or Bain although they wouldn't have been the solution in any case if the goal was to keep GC open at all costs.

Good Deals: Hangwire, mhuxtable, Travybear

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I remember the days of seeing 4 strats (black, white, red, burst) and maybe 1 Tele (maybe!) on the wall and a couple LPs. Want a special color? No problem - 20% down special order and no returns. Usually these places were staffed with people who were much bigger douchebags then the typical moron that works at GC. Strings were $9.00 a set at one place and most of them were not open on Sunday or Holidays.

Holy ****************, you mean you couldn't shop every day of the week? How did you cope?

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Holy ****************, you mean you couldn't shop every day of the week? How did you cope?

Honestly? There were catalogs - MF, AMS, Veheman's, etc... and there was a big classified ad book that cost $1.50. I would buy that every week.

If you were not in a fairly large city most stores really had very little when compared even to a poorly stocked Guitar Center.

I remember when I would go to one of the larger cities near me when I was growing up and they would have Fender and Gibson that my local dealer didn't ever have (only seen in Frontline!) and there would be pedals and amp brands you may see on MTV or at a show but wouldn't see in the store.

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i grew up in a town with a ****************load of music stores, so maybe my perspective is skewed. but i remember the days before guitar center and the prices certainly weren't higher. i mean, they were way cheaper but that was a long time ago, so adjusted for inflation they were probably similar. plenty of shops had great selection on a lot of **************** and it was awesome. you could make a day og going around to different shops and seeing all the cool **************** they would have looking for something to spend your money on. the employees were generally total ****************ing douchebags, but no worse than the morons at guitar center. post gc, a lot of those stores shrank, had less and less stuff, and finally went out of business. even some of the really good ones.

guitar center is great when you're on tour and need an easy to find, easy to get to place for everyone to get some strings and pics and drum heads and cables and replace some broken part. they always have a store in some ****************ty strip mall right off the highway. but other than that, i don't think they've done some great service to musicians or made prices lower or anything. i'd be happy to see them go, although i know that with the internet we won't return to the same situation we had before.

Honestly? There were catalogs - MF, AMS, Veheman's, etc... and there was a big classified ad book that cost $1.50. I would buy that every week.

If you were not in a fairly large city most stores really had very little when compared even to a poorly stocked Guitar Center.

I remember when I would go to one of the larger cities near me when I was growing up and they would have Fender and Gibson that my local dealer didn't ever have (only seen in Frontline!) and there would be pedals and amp brands you may see on MTV or at a show but wouldn't see in the store.

I remember it well. Relying on mail order ruled I miss those days. More choice and more opportunity to spend/waste cash isn't good for humans.